Walt Disney (DIS) stock is down nearly 10% midday Tuesday after the media and entertainment giant's revenue came up short of Wall Street's expectations for its fiscal second quarter.
In the three months ended March 30, Disney's revenue increased 1.2% year-over-year to $22.08 billion. Earnings per share (EPS) were up 30.1% to $1.21 from the year-ago period.
Disney's results were given a boost by strong numbers from Disney+ and Hulu, which each posted a profit for the first time ever in the March quarter. Additionally, Disney+ Core subscribers were up 6% compared to the end of 2023 to 117.6 million. ESPN, on the other hand, saw a 9% decline in operating income and a 2% drop in paid subscribers.
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The top- and bottom-line results were mixed compared with analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $22.11 billion and EPS of $1.10.
As a result of its impressive earnings results in the first six months of its fiscal year, Disney raised its full-year EPS outlook, now calling for 25% year-over-year growth vs its previous guidance of 20% growth.
"Our strong performance in Q2, with adjusted EPS up 30% compared to the prior year, demonstrates we are delivering on our strategic priorities and building for the future," Disney CEO Bob Iger said in a statement. "Our results were driven in large part by our Experiences segment as well as our streaming business. Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4."
Is Disney stock a buy, sell or hold?
Despite Disney's mixed results, analysts are still overwhelmingly bullish on the blue chip stock. According to S&P Global Market Intelligence, analysts' average target price for DIS stock is $126.48, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy.
BofA Securities is one of the firms with a Buy rating on Disney stock. It also has a $145 price target, representing implied upside of nearly 40% to current levels.
"DIS reported a solid fiscal second quarter with revenue essentially inline and operating income modestly ahead of our expectations," BofA analyst Jessica Reif Ehrlich said in a May 7 note. She adds that near-term catalysts for the Dow Jones stock include an inflection in profitability for its direct-to-consumer division and additional updates on the company's strategic priorities.
Today's pullback makes for an attractive buy-the-dip setup, says Don Montanaro, president of Firstrade. "Smart investors might want to buy Disney when it dips like it has today, and then patiently hold as the future dynamism of streaming revenues emerges over time," Montanaro says. "Imagine ESPN as a personalized streaming service including integrated social media interactions with star athletes plus easy gambling at viewers" fingertips. That's a differentiated, modern experience."
The executive adds that investors who share this long-term outlook and have plenty of patience should adopt a buy-and-hold strategy with Disney stock.
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FAQs
Disney's shares fell after the entertainment giant released its latest quarterly results, including a loss in the latest three-month period.
Should I sell or keep my Disney stock? ›
With its 3-star rating, we believe Disney's stock is fairly valued compared with our long-term fair value estimate of $115 per share. We project linear networks revenue (which no longer includes ESPN after the firm changed its reporting segments) to average 1%-2% annual growth over our five-year forecast.
What are analysts saying about Disney stock? ›
Based on analyst ratings, Walt Disney's 12-month average price target is $129.38. Walt Disney has 27.83% upside potential, based on the analysts' average price target. Walt Disney has a consensus rating of Strong Buy which is based on 20 buy ratings, 5 hold ratings and 0 sell ratings.
Why are Disney's earnings down? ›
Disney's traditional TV business continues to suffer from declining viewership and was hurt in the quarter by a decline in advertising revenue. It also brought in lower affiliate revenue as a result of its new deal with Charter Communications, which includes the cable company dropping eight of Disney's cable networks.
Is Disney still making a profit? ›
Disney turned a profit on streaming for the first time
The company's direct-to-consumer business, which includes Disney+ and Hulu, posted $47 million in profit for the quarter, a sharp turnaround from its $587 million loss in the year-ago period. Revenue also showed solid growth, rising 13% to $5.64 billion.
Is Disney buying back shares? ›
Disney announced that it was boosting its semi-annual dividend payment by 50% to $0.45 per share, and the company plans to spend about $3 billion in fiscal 2024 on share buybacks. The new dividend plus the share buybacks add up to more than $4.6 billion of capital returns to shareholders over the next year.
Will Disney stock ever recover? ›
It expects to recover by the end of fiscal 2024, but this doesn't mean that shareholders need to worry. Let's go over some of the reasons why Disney stock can stay hot even as the temperatures start to heat up in the coming months.
What will Disney stock be worth in 5 years? ›
Long-Term Walt Disney Stock Price Predictions
| Year | Prediction | Change |
|---|
| 2025 | $ 104.69 | 3.78% |
| 2026 | $ 108.65 | 7.71% |
| 2027 | $ 112.76 | 11.79% |
| 2028 | $ 117.03 | 16.02% |
2 more rowsThe 22 analysts with 12-month price forecasts for Disney stock have an average target of 127.27, with a low estimate of 93 and a high estimate of 145. The average target predicts an increase of 26.17% from the current stock price of 100.87.
Who holds the most Disney stock? ›
Vanguard Group – 153,769,084 – 8.43%
On May 10, 2024, Vanguard Group filed an SEC report disclosing ownership of 153,769,084 shares of The Walt Disney Company for the first quarter of 2024. This represented 8.43% ownership of the company, making Vanguard the largest shareholder of Disney.
Historical daily share price chart and data for Disney since 1962 adjusted for splits and dividends. The latest closing stock price for Disney as of June 10, 2024 is 102.74. The all-time high Disney stock closing price was 201.91 on March 08, 2021.
What is a good price to buy Disney stock? ›
The 92 analysts offering price forecasts for Walt Disney have a median target of 125.17, with a high estimate of 160.00 and a low estimate of 76.00.
Is Disney losing money in 2024? ›
Walt Disney (NYSE:DIS) Second Quarter 2024 Results
Revenue: US$22.1b (up 1.2% from 2Q 2023). Net loss: US$20.0m (down by 102% from US$1.27b profit in 2Q 2023). US$0.011 loss per share (down from US$0.69 profit in 2Q 2023).
Why are Disney stocks crashing? ›
In the U.S., Disney attributed the decrease in operating income to “the impact of the nonrenewal of carriage of certain networks by an affiliate” (a reference to Charter dropping eight cable networks last fall) and a decline in ad revenue reflecting lower average viewership.
Is Disney doing good financially? ›
Disney said that due to its second-quarter performance, it now has a full-year adjusted earnings per share growth target of 25%. It previously predicted growth of at least 20%.
How much has Disney lost in market cap? ›
What Disney shareholders would probably like to forget is that DIS stock is still worth only about half of what it was at its peak. Indeed, DIS stock has lost about 48% of its value since hitting a closing high back in March 2021, shedding $175 billion in market capitalization in the process.
Is Disney streaming profitable? ›
Disney net earnings, by sector
In Q2 2024, the net earnings were $3.8 billion, with direct-to-consumer earnings being -$18 million. Disney on Tuesday said Disney+ and Hulu combined were profitable last quarter, an update that should give investors confidence in its streaming strategy.
What are Disney Q2 earnings for 2024? ›
Walt Disney (NYSE:DIS) Second Quarter 2024 Results
Revenue: US$22.1b (up 1.2% from 2Q 2023). Net loss: US$20.0m (down by 102% from US$1.27b profit in 2Q 2023).
Why did Disney spike? ›
Key Points. Disney impressed investors with its fiscal first-quarter earnings report. The company also announced a new sports streaming service joint venture with Fox and Warner Bros. Discovery.
